As explained in recitals 25 and 26 of its preamble, Directive 2003/109/EC (“the directive”), concerning the status of third-country nationals who are long-term residents, does not apply to the UK, Ireland and Denmark.

Nevertheless, since this is a significant case on the status of foreigners in other participating member states, it is more than worthwhile to examine the judgment.

The exclusion in article 3(2)(e) stated that the directive does not apply to third-country nationals who reside solely on temporary grounds such as au pair or seasonal worker, or as workers posted by a service provider for the purposes of cross-border provision of services, or as cross-border providers of services or in cases where their residence permit has been formally limited. In this case, the Court of Justice of the European Union (CJEU, Third Chamber) held that that concept did not apply to a fixed-term residence permit granted to a specific group of people which could be renewed indefinitely and where the formal limitation did not prevent the long term residence (which was for the referring court to decide) of the third-country national in the member state concerned.

The Question

The Raad van State (Netherlands, the referring court) asked whether (i) the concept of a residence permit which has been formally limited included a fixed period permit which under domestic law did not offer any prospect of a residence permit of indefinite duration especially given that the fixed period permit can in principle be extended indefinitely and (ii) a particular group of persons such as spiritual leaders and religious teachers were excluded from the scope of the directive. (This was referred as one question. I have just broken it down for simplicity.)

Background

Mr Mangat Singh (“S”) came to the Netherlands in 2001 and was subsequently granted an “ordinary fixed-period” residence permit which was valid for his activities as a spiritual leader or religious teacher. S’s residence permit was extended, from time to time, but the terms of the permit were narrowed for work as a spiritual leader only.

While S’s permit remained valid until early 2008, in 2007 he nevertheless applied for a “long-term resident’s EC permit.” Under article 8 of the directive this means a residence permit, which must be valid for at least 5 years and is automatically renewable, issued by the member state concerned upon the acquisition of long-term resident status.

But the State Secretary van Justitie (who extended S’s fixed-period permit for a year) rejected the application on the basis of national law under which someone such as S could be in possession of a residence permit which could be extended indefinitely but was still technically considered temporary.

Whilst not at issue in the instant proceedings, in 2010 subsequent domestic law took the position that the residence of spiritual leaders and religious teachers was considered to be of a non-temporary nature per se and periods of residence under these heads would count towards the acquisition of an ordinary residence permit of indefinite duration endorsed as long-term EC resident: [19] – [27] of the judgment.

To put it in simple terms, article 3.5 of the decree on foreign nationals (Vreemdelingenbesluit, Stb. 2000, No 497) read with section B1/2.4 of the guidelines on the implementation of the law on foreign nationals (Vreemdelingencirculaire, which enabled the minister to set out detailed rules to exercise his powers) meant that “only” article 3.5 was determinative of whether or not a residence permit was temporary or non-temporary. Because S’s residence permit was caught by the operation of article 3.5(2)(d) of the Vreemdelingenbesluit – that the right of residence shall be temporary if the residence permit is granted with a restriction relating to the exercise of work as a spiritual leader or religious teacher – his residence permit was considered to be of a temporary nature.

S did not accept the State Secretary’s decision. His objections were rejected by the State Secretary but the Rechtbank ‘s-Gravenhage overturned the decision and ordered a fresh decision to be made in light of its judgment because it found that article 3(2)(e) of the directive covers only situations in which the residence is of a temporary nature per se. So allowing members states to exclude the situation of a foreign national in possession of a residence permit that can be extended indefinitely – such as S – would undermine the efficacy of the directive.

Aggrieved, the State Secretary took the matter to the Raad van State which stayed the main proceedings. It interpreted the expression “formally limited” in article 3(2)(e) of the directive to mean that a margin of discretion was conferred on member states to impose formal restrictions on a fixed-period residence permit. The matter was referred to the CJEU. Given that the objective of the directive is to harmonise the conditions for individuals, such as S, to become long-term EC residents, the grant of a margin of discretion would vitiate the efficacy/objective of the directive because the meaning of the concept of a “formally limited residence permit” were muddled.

The Court of Justice of the European Union

The CJEU agreed that the terms of article 3(2)(a) were “not unambiguous” and its exact scope was unclear [31]. Logically, au pairs, seasonal or posted workers and cross-border providers of services resided in the member state concerned solely on temporary grounds but that is not necessarily the case in respect of a national whose residence permit is formally limited [33].

A formal limitation attached to a residence permit could not be attributed solely to the temporary nature of that permit and therefore article 3(2)(e) should be understood as covering (i) third-country nationals who reside solely on temporary grounds and (ii) third-country national whose residence permits have been formally limited [34] – [38].

The Court noted that in relation to cases where a third-country national’s residence permit has been limited, the directive was silent on the concept of “legal residence” or the rights or conditions concerning that residence which fell within member states’ competence [39]. In defining the conditions of legal residence member states could formally limit third-country nationals’ residence permits but the formal limitation under national law was not the same as a “formally limited residence permit” within the meaning of article 3(2)(e); [40] – [41]. Since the directive did not (a) set out the meaning of residence permits which were formally limited and (b) refer to the meaning of those words in national law, those words designated “an autonomous concept of EU law” which required uniform interpretation all over the member states: Ziolkowski [2011] EUECJ C-424/10, [32] & case-law applied [42] – [43].

[44] – [45]: Under the Court’s jurisprudence context/purpose were important in construing the meaning and scope of the terms of article 3(2)(e) and the preamble explained the directive’s objectives as (a) the integration of third-country nationals who were long-term residents, Commission v Netherlands[2012] EUECJ C-508/10, see post here, and (b) achieving parity between such nationals’ legal status and that of the member states’ nationals. Equally, the period of legal and continuous residence of five years expressed in article 4 of the directive evinced long-term residence of the person concerned who should be granted long-term resident status [46]. Essentially, article 3(2)(e) only excludes residence “on temporary grounds” which is “not long term” such as au pair work, seasonal work or the provision of cross-border services which was of a temporary nature per se and did not prima facie reflect any intention on the part of third-country nationals to settle in the territory of the member states on a long-term basis [47] – [48].

It was observed that the fact that a residence permit contains a formal restriction was not indicative of whether – despite the existence of such a restriction – its holder might settle on a long-term basis in a member state [50]. A formal limitation in national law, where the formal limitation did not prevent the long-term residence of a third-country national concerned, was not construable as a formally limited residence permit within the meaning of article 3(2)(e) because such an approach would jeopardise the directive’s objectives and deprive it of its effectiveness [51]; Commission v Netherlands, [65]. Hence, whether the formal limitation of a residence permit within the meaning of national law allows the bearer long-term residence status was “for the national court to ascertain” [52]. In respect of article 3(2)(e), it was irrelevant that the formal limitation concerned only a specific group of people [52].

Because a residence permit could be successively extended beyond five years or even indefinitely indicated strongly that the formal limitation attached to the permit did not stop the long-term residence of the third-country national in the member state concerned. That question, however, would be “for the national court to ascertain, in the light of all the circumstances, whether that is indeed the case” [54].

Where the national court decided that the formal limitation did not stop long-term residence, the residence permit would not fall within article 3(2)(e) and the residence on the basis of the permit would count as legal residence for its holder to acquire the status of a third-country national who is a long-term resident [55].

The CJEU answered the question referred by the Raad van State in the following terms:

[56] In the light of the foregoing considerations, the answer to the question referred is that Article 3(2)(e) of Directive 2003/109 must be interpreted as meaning that the concept of ‘residence permit [which] has been formally limited’ does not include a fixed‑period residence permit, granted to a specific group of persons, the validity of which may be extended indefinitely without however offering any prospect of a residence permit of indefinite duration where such a formal limitation does not prevent the long-term residence of the third‑country national in the Member State concerned, that being a matter for the referring court to ascertain.

Comment

Directive 2003/109/EC has repeatedly been pilloried for falling short of its objectives. Its critics maintain that the directive is failing third-country nationals who, by 2006 estimates, numbered 18.5 million or 3.8% of the total EU population of almost 493 million.

In his seminal work The Long Term Residence Status as a Subsidiary Form of EU Citizenship, Diego Acosta Arcarazo analsyed third-country nationals with no right of entry and residence in the EU of their own as “the legal other”: individuals who have an interest in benefitting from the provisions of directive. Otherness remained a function of (a) eligibility (b) acquisition conditions (c) rights associated (d) security of rights acquired and (e) residence in other member states. Arcarazo observed that the original setting in which the directive emerged “changed with the adoption of the Amsterdam Treaty” following which “further integration of third-country nationals within the Union with rights and obligations comparable to those of EU citizens” became the keystone of immigration policy in the EU.

The inclusion of a clause regarding those whose residence permit had been formally limited was at added on Belgium’s say-so and was not founded on any clear reasoning. In The Legal Elements of European Identity, Elspeth Guild saw this state of affairs as a nothing short of a “mockery”. In the final analysis, scholarship on the subject saw national legislators and the European Commission as facilitating the benefits created by the directive.

But imperatively the CJEU’s role in interpreting the directive’s terms was seen as crucial in following the rights based approach that the Court has embraced in respect of European citizens pursuant to Directive 2004/38/EC (on the right of Union citizens and their family members to move and reside freely within the member states’ territory). From what one can make of it, the Court’s ruling should alleviate the criticisms that had plagued Directive 2003/109/EC over the years.

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